MOIL Ltd. share price target

We recently organized an underground mine visit in Gumgaon for our clients and thereafter interacted with Mr Ajit Kumar Saxena (Chairman and Managing Director), Mr Rakesh Tumane (Director- Finance), Mr M.M. Abdulla (Director- Production & Planning) and other Board of Directors.

A schedule ‘A’ Miniratna Category-I company, MOIL is the largest manganese ore producer in India, with market shares at ~20% domestically and ~2.2% globally.

Q2FY25 Revenue/EBITDA of Rs. 292 crore/Rs. 79 crore fell 16%/18% y-o-y and was lagging our estimates as the decline in sales volume (down 18% y-o-y and 34% q-o-q) affected the performance.

With moderation of prices, production growth is likely to be the main driver

MOIL Limited has posted a weaker set of standalone numbers for Q1FY20 wherein it revenue at Rs. 2801 Mn has declined by 10.7% against Rs. 3135 Mn in Q1FY19 and our estimate of Rs. 3801 Mn on YoY basis as a result of changes in product mix containing higher proportion of medium and low grade of ore available for sales and slowdown in steel demand which curtailed manganese ore demand.

Q4FY19 A Mixed Performance: MOIL Limited has posted a mixed set of standalone numbers for Q4FY19 whereinit's revenue at Rs. 4366 Mn (as against our estimate of Rs. 4360 Mn) grew by 31.2% on QoQ basis and 9.8% on YoY basis on the back of strong demand from steel sector.

As per the press release, MOIL has achieved highest ever turnover in FY19 of Rs14.4 bn (unaudited and provisional), up 9% YoY, which is higher than our estimates of Rs12.5 bn. The outperformance was driven by record sales of non-fines (high grade ore) to ~1.1 MT, up 13% YoY. Average realisation during the quarter was also higher during the year (in 9MFY19, non-fines realisation was up 7.8% YoY). During the year, the company has opened a new mine Parsoda, in Nagpur district, with an annual production of 40,000...

As per the press release, MOIL has achieved highest ever turnover in FY19 of Rs14.4 bn (unaudited and provisional), up 9% YoY, which is higher than our estimates of Rs12.5 bn. The outperformance was driven by record sales of non-fines (high grade ore) to ~1.1 MT, up 13% YoY. Average realisation during the quarter was also higher during the year (in 9MFY19, non-fines realisation was up 7.8% YoY). During the year, the company has opened a new mine Parsoda, in Nagpur district, with an annual production of 40,000...

Q3FY19 - A Quarter of Impressive Performance: MOIL Limited has posted better-than-expected standalone numbers in Q3FY19 wherein it's revenue at Rs. 3328 Mn grew 11% on YoY basis, EBITDA at Rs. 1546 Mn grew by 26% and PAT at Rs. 1203 Mn grew by 16%.

MOIL Q2FY19 revenue was higher than estimates, driven by better than expected sales volume. Blended ore realizations stood at Rs10,560/tonne were 12.7% below our estimates, which partly offset the benefit of higher volumes. The company had taken 5% price hike in the month of Sep'18 and...

Driven by tight supply and restocking of the inventories, international prices of manganese ore has rebounded to multi-year high of over $7.5/dmtu (CNF India is at $8.5/dmtu). Backed by the firm international price, MOIL has further increased manganese ore price in April 2018 by 5-12% across all the grades, in addition to the 5-10% hike taken in the month of March 2018. Besides, firm international prices, lower supply from the domestic miners also supported the recent increase in the domestic manganese ore prices. The company reported highest ever turnover of Rs13 bn (provisional...

Results came below expectations due to subdued offtake and realization. Revenue stood at Rs3bn (-16% yoy/+5% qoq). Sales volume stood at 3.2mt (-8% yoy) due to lower nonfine offtake (-20% yoy to 2.35mt). Blended realization rose by 10% yoy to Rs10,267/tn. EBITDA stood at Rs1.2bn (-6% yoy/+5% qoq). EBITDA margin expanded by 414bps yoy to 41%. EBITDA/tn increased by 12% yoy to Rs4,207 (-4% qoq). APAT increased by 2% yoy to Rs1bn (+12% qoq). Other income rose by 19% yoy to Rs474mn (40% of EBIT). Effective tax rate declined marginally to 33% (-271bps yoy). Board approves Rs3/share interim dividend and announces buyback of 8.8mn shares at Rs240. We see better volume going ahead, underpinned by successful completion of various...

MOIL continued to report a mixed performance in 2QFY18. While blended sales realisation increased by 81% YoY (+8% QoQ) to Rs10,404/tonne (vs. our estimate of Rs9,965/tonne), sales volume declined by 14.8% YoY and 13.7% QoQ to 2.65 lakh vs. our estimate of 3.25 lakh tonne. Notably, the impact of price hikes undertaken in 1QFY18 was witnessed in 2QFY18. Also, MOIL had liquidated substantial inventory in 1QFY18, as the production at 2.68 lakh lagged sales by a decent margin. The same trend was also seen in 2QFY18 as production lagged sales, however the margin has narrowed. EBITDA surged by 547% YoY (-3.9% QoQ) to Rs1.16bn vs. our estimate of Rs1.55bn due to lower sales, while EBITDA margin expanded by 3,145bps...

Downgrade to NEUTRAL, with a TP of Rs 237 (5.5x Sep-19 EV/EBITDA). MOIL reported yet another strong quarter (EBITDA: Rs 1.17bn, (3.9)% QoQ, not comparable YOY, est Rs 1.44bn). The miss against estimates was primarily on account of lower volumes (265kT, (14.8)/ (13.7) % YoY/QoQ, est 311kT). The strong performance continues to be driven by pricing (Rs 10,404/t, 80.7/8.1% YoY/QoQ).

Volume Enthuses but Margin Disappoints; Reiterate BUY MOIL has reported a mixed performance in 1QFY18. While blended sales realisation increased by 51.5% YoY (down 14.9% QoQ) to Rs9,628/tonne (missing our estimate of Rs9,809/tonne), sales volume rose by 20.9% YoY and 42.1% QoQ to 3.07 lakh tonne topping our estimate of 2.75 lakh tonne. Notably, the impact of price cuts undertaken in Jan-Feb'17 was felt in 1QFY18. Further, MOIL liquidated substantial inventory in 1QFY18, as the production at 2.68 lakh lagged sales by a decent margin. Though its EBITDA remained sequentially flat (up 388% YoY) to Rs1.21bn (vs. our estimate of Rs1.5bn), EBITDA margins fell by 1,247bps QoQ to 35.7% (vs. our...

We maintain our recommendation and TP of 445/sh (5.0x June 19 EV/EBITDA). MOIL's revenues were ahead of estimates (5.6% beat), driven by better volumes (307 kT, 20.9% YoY, 42.1% QoQ). However, EBITDA missed estimates (Rs 1.21bn vs est 1.61bn, 3.5x/flat YoY/QoQ), owing to lower realisations (Rs 9,628/t, 49.9/-14.9% YoY/QoQ, est Rs 11,739), higher other expenses and employee costs (12.4/2.2% YoY/QoQ). Inventory liquidation (39kT, mostly lower grades) drove lower realisations and higher sales volumes. Despite the miss, this is another strong quarter, given the Rs 1.2bn EBITDA run-rate. The board declared a 1:1 bonus as well.

Mixed Quarterly Performance; Volume to Remain Strong MOIL has reported a mixed performance in 4QFY17. Its blended sales realisation zoomed 119% YoY and 20.4% QoQ to Rs11,309/tonne (vs. our estimate Rs9,250), while sales volume fell by 43% YoY and 38% QoQ to 2.16 lakh tonne vs. our estimate of 3.55 lakh tonne. Notably, MOIL liquidated substantial inventory in 3QFY17, as production at 2.72 lakh lagged sales by a wide margin. Though its EBITDA declined by 7% QoQ to Rs1.21bn (vs. Rs57mn loss in 4QFY16), EBITDA margins rose by 1,134bps YoY to 48.2% (vs. our estimate of 39.8%). Adjusted PAT surged by 442% YoY and 14.2% QoQ to Rs1.15bn (vs. our estimate of Rs1.28bn) despite other income rising...